Who Would Pay for This Medicaid Expansion?

ByChris Jacobs

Even as states continue to debate the costs of expanding Medicaid under the Affordable Care Act, some in the medical field are proposing new commitments for the program.

Last week Politico reported on a letter to Congress by several physician groups asking that increased reimbursements for primary-care physicians participating in Medicaid be extended. Low reimbursement levels in many states have led to low physician participation in Medicaid. The budget reconciliation bill passed just after Obamacare in March 2010 included payment increases for primary-care physicians participating in Medicaid—bumping up reimbursements to Medicare levels. But only two years’ worth of payment increases, in 2013 and 2014, were funded.

With the temporary bump expiring soon, physician groups have asked for this provision to be extended for at least two years and be expanded in scope; under the broadened provision, obstetricians and gynecologists would qualify as primary-care physicians eligible for the higher payment levels.

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The proposal raises several questions, including whether states would cover any of the cost of extending the increased payments. The federal government fully funded the first two years of payment increases, but federal debt is now more than $17 trillion. Washington may decide that states should pay for some of what amounts to an average 73% increase in primary-care reimbursement levels.

States considering whether to expand their Medicaid programs under Obamacare, and whether the federal government will honor its fiscal commitments for that program’s enhanced match, would be wise to watch the debate around this reimbursement bump. As with other costly Obamacare “fixes” for which advocates have not yet outlined budgetary savings, they could one day be on the hook for more than they bargained for.

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